Airline Looks At Options For Cutbacks

June 26, 1986|By Peter Adams of The Sentinel Staff

People Express, which said Monday that it may have to be put up for sale, is continuing to consider shifting its services in Central Florida, but ''no decision has yet been made'' to leave Melbourne Regional Airport, said Russell Marchetta, a spokesman for the airline.

People Express, with a $500 million debt, is considering moves to pull out of its smaller and less profitable markets, Marchetta said. How much of the airline would be put on the block might depend on how much the no-frills carrier can save by pulling out of the smaller markets.

The Melbourne airport could lose People's two daily flights by September. The Newark, N.J.-based airline's contract with the airport extends to October 1988.

Analysts have said that the 5-year-old airline grew too quickly and moved into unpromising markets. ''They wanted to be everything to everyone,'' said Louis Marckesano of Janney Montgomery Scott Inc. in Philadelphia.

People Express lost $58 million on revenue of $329 million for the first quarter of 1986.

Marchetta said Melbourne has not generated the passenger traffic the airline expected. ''Melbourne is a good market,'' he said, ''but it's just too close to Orlando.'' If People Express does pull out of Melbourne, Marchetta said, it might add two or more flights to its current four flights a day at Orlando International Airport. In that event, he said, People Express would contract with Provincetown-Boston Airline, a subsidiary based in Naples, to assure continued service to Brevard.

Ed Foster, director of the Melbourne airport, said he has asked the airline not to abandon Brevard County. The airport would lose $2,800 a month in landing fees without People Express, Foster said.